Help To Buy

Help to Buy is a government scheme which can help you to buy a property with just a 5% deposit with a Help to Buy: Equity Loan, subject to eligibility, terms and conditions 

The Government has announced a new Help to Buy scheme to run from April 2021. It is restricted to first-time buyers and will include regional price caps to ensure the scheme reaches people who need it most. There are no changes to the current Help to Buy equity loan scheme which runs to March 2021.

The new scheme will run from April 2021 to March 2023. As with the current scheme, under the new plans, the Government will lend buyers up to 20% of the cost of a newly built home, and up to 40% in London.

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Help to Buy is a government scheme which can help first time home buyers get a property with just a 5% deposit. Use this guide to learn how Help to Buy schemes work, how to qualify and the different options available.

How does Help to Buy work?

Help to Buy: Equity loans

Where to go for more information

How does Help to Buy work?


The coronavirus outbreak has affected the completion dates for Help to Buy homes. You can find out more on

The Help to Buy scheme offers an equity loan where the government lends first-time buyers and existing homeowners money to buy a newly-built home.

The purchase price must be no more than £600,000. Under this scheme, you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price.

Use our Mortgage Calculator, to work out how much you’d pay back each month.

The Government has confirmed it will extend its Help to Buy equity loan scheme from 2021 to 2023. However, this extension will be restricted to first-time buyers purchasing newly built homes.

From 2021, there will also be new regional price caps which could reduce the maximum value of homes that can be bought through the Equity Loan Scheme.

Who can’t apply for the scheme?

- You can’t use the above schemes to buy a second home or a property to rent out.

- If you use Help to Buy, you can only take out a repayment mortgage.

- You can’t buy a property for more than the set price limits (see below).

The Help to Buy scheme is available in England only. 

Help to Buy: Equity loans

How they work

You need at least 5% of the sale price of your new-build flat or house as a deposit 

The government lends you up to 20%, or 40% if you live in London, of the sale price.

You borrow the rest (up to 75%, or 55% if you live in London) from a mortgage lender, on a repayment basis.

The equity loan must be repaid after 25 years, or earlier if you sell your home.

You must repay the same percentage of the proceeds of the sale as the initial equity loan (i.e. if you received an equity loan for 20% of the purchase price of your home, you must repay 20% of the proceeds of the future sale).


Cost of home - £200,000

Cost name Percentage of total £ value

Your deposit 5% £10,000

Equity loan 20% £40,000

Mortgage 75% £150,000

TOTAL £200,000

The interest rate you will be charged

You don’t pay any interest or fees on the government’s equity loan for the first five years. In the sixth year, you’ll be charged 1.75%.

After then, the fee rises by inflation based on the Retail Prices Index (RPI) plus 1% each year.

RPI figures are put together by the Office for National Statistics.

See below for an example of how the fees work.

Interest rates for paying back your loan

Years 1-5: no fees

Year 6: 1.75% of the loan

Year 7 onwards: 1.75% + RPI + 1%

These fees do not go towards paying off the government loan.

When you sell your home, or the mortgage is paid off, you have to repay the equity loan plus a share of any increase in the value. It works like this:


Home bought for £200,000, sold for £250,000

Increase in value 25%

Equity loan repayment £50,000 (£40,000 + 25% profit)

Mortgage £150,000 (less capital repayments)

Your share at least £50,000

The remaining £50,000 (or more) can be used as a deposit on your next home.

The exact amount depends on how much you’ve paid off your mortgage.

You can also pay back part or all of your loan at any time.

The minimum percentage you can pay back is 10% of the market value of your home.

The amount you pay will depend on the market value at the time.

Where to go for more information

Please click here to visit the government find a help to buy agent

Speak to our Financial Adviser for further assistance.

Help to Buy is available subject to eligibility, terms and conditions.